Sunday, May 25, 2008

California's payroll soars under Schwarzenegger: Six-figure earners more than double

The state of California's payroll is skyrocketing, even as its budget deficit has grown to billions of dollars in recent months.

In Gov. Arnold Schwarzenegger's first four years, the total bill for state workers' salaries jumped by 37 percent, compared with a 5 percent increase in the preceding four years under then-Gov. Gray Davis, a Chronicle analysis of state payroll records shows.

One month before Schwarzenegger took office in November 2003, just eight state employees earned more than $200,000 a year working in the core state government, which excludes universities and the Legislature. In April of this year, there were nearly a thousand, according to records.

And the number of state employees making six-figure salaries has more than doubled since 2003, to nearly 15,000. Meanwhile, the number of state workers has grown by 26,000 under Schwarzenegger after being cut by Davis, who was recalled from office in the midst of a severe budget crisis.

Some of the pay increases in recent years have been out of Schwarzenegger's control, including previously negotiated pay raises for some employee unions and court-ordered pay hikes for medical workers in the state prison system that are estimated to have cost the state hundreds of millions of dollars.

Also fueling the spurt in payroll growth: salary increases for employees in a few politically powerful labor unions, including the state's prison guards, as well as pay hikes for workers in the upper echelons of state government. Elected members of the Legislature, who will decide in the coming weeks how to resolve the state's $17.2 billion deficit for the fiscal year beginning July 1, also received increases last year.

"Salaries have only gone one way - up," said Charles Murray, chair of the California Citizens Compensation Commission, which sets pay for the state's top elected officials. Murray, a Republican from San Marino (Los Angeles County), has called for a pay cut for legislators and other elected officers in light of the state's huge deficit.

"If we had control over the janitors, I'd ask them to take a pay cut, too," he said. "The reasoning is very simple: We're in big trouble moneywise."

Legislators, gubernatorial aides and top medical professionals have received pay hikes in the last 12 months. And as the state looks at drastic cuts in many programs, the governor is proposing about $260 million in salary increases for the state's prison guards, whose pay jumped about 34 percent in five years under their previous contract.

At the same time, pay for many lower-ranking civil service workers has not kept up with the 15 percent increase in the state's consumer price index in the past four years, according to an analysis by the state Legislative Analyst's Office. Most civil service workers saw their pay rise by only 12 percent over that time.

The winners of the payroll race seem to be the unions with the strongest political ties or those who spend big bucks on political contributions and lobbying, said Christina Lokke of California Common Cause, a good-government watchdog group.

"There's lobbying going on among all these groups of state employees - and the outcomes are pretty imbalanced," she said. "Sometimes, politics and money beat good policy, that's when the public loses out."

Schwarzenegger spokesman Aaron McLear said much of the blame rests with the Davis administration, which negotiated some contracts in which workers deferred initial pay raises for bigger gains in later years.

"Essentially, when the governor came into office, many of these promises had already been made," he said.

California Highway Patrol officers got a 32 percent pay increase over four years through a contract negotiated by the Davis administration that linked their pay to the five largest police departments in the state. The average officer now makes $73,000 a year. The state's professional engineers received a 31 percent pay raise through a similar automatic-increase mechanism negotiated by the Schwarzenegger administration.

Examples of the salary hikes revealed in the state's payroll database and compensation documents include:

-- More than 100 physicians and surgeons working in state prisons saw their pay increase from an average of $129,000 to $238,000 in four years, and salaries for supervising psychiatrists jumped to $236,000, after a federal court-appointed receiver, Robert Sillen, determined that pay had been so low that the system was having difficulty attracting competent medical workers.

-- Legislators' annual pay climbed from $99,000 in 2003 to $116,000 this year, while the state attorney general's increased from $148,000 to $184,000. The governor's salary also rose, from $175,000 to $212,000, but Schwarzenegger declines to accept his salary. The state citizen's compensation commission sets these pay rates, and some of its members are now looking at whether it can lower them.

-- Eleven top advisers in the governor's office got hefty pay increases in August, a week after the governor signed a budget that slashed programs for the homeless, mental health services and parks. Chief of staff Susan Kennedy received a $32,000 pay raise, boosting her government salary to $175,000. Four years ago, the top aide in the governor's office earned a base pay of $138,000.

-- At the top of the state's salary list were chief officers for the California Public Employees' Retirement System and the state's stem cell research facility in San Francisco, known as the Institute for Regenerative Medicine, each of which is controlled by a separate board that is independent of state elected officials.

CalPERS Chief Investment Officer Russell Read made a base salary of $555,000 - plus incentive pay that pushed his total earnings to more than $900,000, according to a spokeswoman for the system. Alan Trounson, a renowned biologist appointed last year to head the stem cell agency, is paid $490,000. Four years ago, the top employee in the retirement system made a base salary of $360,000, and the stem cell agency didn't exist.

H.D. Palmer, a spokesman in the governor's Department of Finance, said state pay rates often aren't competitive with those in the private sector and in city and county governments throughout the state. This year, the three top investment officers at CalPERS, including Read, announced they will leave to pursue private-sector investment jobs, many of which pay millions of dollars a year.

"While the public needs to be concerned with the salaries being paid out to state employees, it also needs to know the state is in a competitive market and we need to find ways to attract and keep the best people," said Jason Dickerson of the Legislative Analyst's Office, which has recommended that the state keep a tight lid on any further pay increases.

Schwarzenegger's proposal for closing the state's huge budget gap next year includes a slight reduction in total state payroll costs - mostly by eliminating positions.

Still, this year the state will go into contract negotiations with 20 of its 21 major labor unions, all of which will be seeking pay hikes that are not currently in the budget.

"Because of collective bargaining agreements, we can't just go in and cut people's pay," said Palmer. "One way of reducing the payroll is to say to departments 'What positions can you do without?' "

Arnold has been very,very good for government workers.It appears nothing in California can stop the government workers from having a higher and higher income.Nothing.